The cloud spending in enterprises and other business will see a dramatic upsurge in 2017. IaaS and SaaS providers will be on upfront as enterprises are more relying on these services and are reckon to spend a third of their total IT budget on cloud hosting and services next year.
451 Research in its latest report unveils that enterprises currently spend 28% of their total enterprise IT budgets on hosting and cloud services. Next year, that number is will jump to 34%, because of the growing reliance on external sources of infrastructure, application, management and security services.
Sharing analysis on the cloud spending it reveals that just 31% of spending goes towards infrastructure services while nearly 70% of enterprise budgets for hosting and cloud is being spent on other services, which precisely accounts, 42% on Application Services, 14% on Managed Services, 9% on Security Services, 5% on Professional Services for cloud enablement.
“The markets for unmanaged IaaS and SaaS are dominated by large, hyper-scale vendors. However, this spending trend indicates there is an appetite for the type of bundled services a broader market of managed service providers are well positioned to deliver. A strong opportunity exists for service providers offering a diversified set of hosting and cloud services that includes infrastructure and application hosting, as well as managed services and security services delivered around them,” says Liam Eagle, Research Manager at 451 Research and lead author of the Voice of the Enterprise: Hosting and Cloud Managed Services study.
Enterprise IT executives expect to spend 34% of their IT budgets on hosting and cloud services in 2017 Survey finds that resources bundled with management and security services make up nearly half of infrastructure and application services spending, writes the report.
The research reveals that a significant portion of hosting and cloud services spending is on unmanaged or self-managed infrastructure or application services.
Nearly half—44% of infrastructure services spending and 49% of application services spending—is for products that are bundled with additional managed or security services.
Public cloud infrastructure providers, which are used by 69% of respondents, are the most common, followed by managed hosting providers, used by 26% of enterprises.
“The market for managed infrastructure and application services is a longer tail market, with greater opportunities for providers who emphasize expertise in operating, optimizing and securing the infrastructure and application products they deliver,” said Eagle. “This includes opportunities to deliver services based on reselling infrastructure and application services from the largest IaaS and SaaS vendors.”